The growth mechanism of monolayer (ML) graphene on Ru(0001) via pyrolysis of C2H4 was studied by scanning tunneling microscopy (STM), high-resolution electron energy loss spectroscopy (HREELS), and ultraviolet photoelectron spectroscopy (UPS). On the basis of the mechanistic understanding, graphene overlayers ranging from nanographene clusters to graphene film with 1 ML coverage were prepared in a well-controlled way. O-2 adsorption on the graphene/Ru(0001) surface was investigated by STM, UPS, and X-ray photoelectron spectroscopy (XPS). It is revealed that the Ru(0001) surface fully covered by graphene becomes passivated to O-2 adsorption at room temperature and only activated again at elevated temperatures (>500 K). The adsorbed oxygen intercalates between the topmost graphene overlayer and the Ru(0001) substrate surface. These intercalated oxygen atoms decouple the graphene layer from the Ru(0001) substrate, forming quasi-freestanding monolayer graphene atomic crystals floating on the O-Ru(0001) surface.